Finance committee approves resolution to invest up to $2 million with Neighborhood National Bank

The Sweetwater Authority Finance & Administration Committee on March 3 voted to adopt Resolution 25-01 authorizing investments of up to $2,000,000 with Neighborhood National Bank through a CD placement program that spreads federally insured certificates across institutions.

Rich Stevenson, the authority's director of finance, told the committee the proposed investment vehicle uses CDs that are federally insured up to $250,000 per increment and that the CDARS-like program would distribute deposits to maintain full FDIC coverage. He described Neighborhood National Bank as a community development financial institution active in the South Bay; the staff recommendation cited other local government participants including the cities of National City and Chula Vista and Southwestern Community College.

Director Martinez said he had acquaintances tied to the bank and therefore abstained from voting; Director Morrison and Director Yamani voted in favor and the motion passed with two votes in favor and one abstention.

Stevenson said the interest rates on the CDs were slightly lower than some Treasury purchases he had recently made but described the investment as a diversification and community-support measure: "The CDs are, federally insured up to $250,000," he said. Committee discussion noted past participation in similar programs and that the authority has used community banks before.

The committee adopted the resolution authorizing staff to proceed with placing up to $2,000,000 in the program; staff will provide additional board disclosures (for example, bank board membership) when requested by directors.